South Africa's rand relinquished earlier gains against the dollar on Thursday after the International Monetary Fund cut the 2016 domestic growth forecast to barely above zero percent.

Stocks rose, however, led by financial services.

At 1700 GMT, the rand traded at 14.7480 per dollar, up just 0.03 percent from its New York close on Wednesday. It had earlier touched a session high of 14.6000/dollar and traded at 14.6520 just before the IMF report came out at 1345 GMT.

The Fund forecast growth at just 0.1 percent in 2016, down from the 0.6 percent it estimated in May. It cautioned the central bank not to raise interest rates further unless inflation expectations rose significantly.

Analysts expect the rand to remain under pressure this year as sluggish growth raises the risk South Africa's credit rating will be cut below investment grade by the end of the year.

"We think the South African economy will contract by 0.2 percent this year before staging only the most muted of recoveries in 2017," HSBC analyst David Faulkner said in a note.